AUM growth in Europe could exceed 2013 rate

Total assets in the European asset management industry rose 6% in the first half of the year to an estimated €17.8 trillion.

This means the industry is on course to exceed last year’s growth of 9%, which was the same as the average annual growth rate in the past five years, according to ratings agency Fitch Ratings.

However, the agency says deflation in the eurozone and a slowing of asset growth among pension funds and insurers, though unlikely, could cause negative performance and outflows.

Fitch also says inflows to European mutual funds from non-European investors has slowed, and is now stable at about a quarter of total mutual fund assets under management.

“As competition intensifies new money entering the industry may be increasingly ‘hot’ and subject to rapid withdrawal,” warns the agency.

Despite the downside risks, Fitch Ratings says the most likely scenario is that the eurozone recovers gradually and avoids deflation, strengthening the asset management industry.

The agency says the first-half growth came evenly from inflows and performance.

©2014 funds europe

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